"Impact investing covers that category of investment, which is viewed as "sustainable," generating financial returns by integrating consideration of social and environmental factors into the investment strategy. The category also includes a growing number of CDs and other fixed-income investment options--except in this case invested funds are used to support small, sustainable business and community development....What was a niche industry has grown significantly in recent years--now totaling over $2.71 trillion in the United States alone."

But that number is misleading - that includes ALL socially responsible investment funds - it comes directly from the Social Investment Forum which notes $2.71 trillion out of $25.1 trillion in U.S. Investment marketplace. SRI includes a number of practices (screening, shareholder advocacy) that don't result in more dollars flowing to mission driven businesses.

In the 2009 report, Impact Investing, The Monitor Institute defines the term Impact Investing as "Actively placing capital in businesses and funds that generate social and/ or environmental good and at least return nominal principal to the investor." That would define impact investing as a subset of SRI - so we know it is smaller than $2.71 Trillion. The report goes on to aspire to a market that is 1% of assets under management in 10 years (emphasis added)- a number it targets as $500 Billion. But the report doesn't give us a 2009 baseline number.

Mission Related Investments (MRI) and Program Related Investments (PRI) are one sub-class of impact investments. So how much do they add up to? On the advice of my colleague and co-author of Equity Advancing Equity, Lisa Richter of GPS Capital Partners, I went back to the Social Investment Forum to get a value for community investing - which includes PRIs and MRIs, as well as community development finance institutions, community development banks, and community venture funds. Their number? Total community investing assets (2007) $25.77 Billion. Subset of that in MRIs and PRIs? Lisa offered an estimate of $4-5 Billion, based on a report that used 2005 data and trends and self-reports in the last four years. But that $4-5 billion is an informed estimate.

How much of that comes from foundations making PRIs or MRIs? I checked public sites from More for Mission and the PRI Makers Network. I couldn't find hard baseline numbers for now (Please send to me if you have them or can find them). More for Mission is a foundation-led campaign to increase mission investing by $10 billion over the next five years - but, again, provides no baseline number.

Can you help? I need an index and a value for the monograph I'm writing on the future. Those in the space of impact investing and MRIs/PRIs need a baseline to know if they are meeting their growth goals. Standardizing ways to measure the social and environmental returns is critical work, and the impact investing community is working hard on this. Doing so will help with market definition - as those measures can help set "what is impact investing and what isn't."

Is there some industry definition and standard measure of the financial resources in it? If I simply failed in my search and all my email inquiries, please point me in the right direction and forgive my naivete.

If not, well, I'm not the right person to go adding up all the numbers reported on these sites, classifying them, and defining a number - but someone out there is. Please - someone - create the "I-cubed"- Impact Investing Index. Define your terms, analyze current size of the components, and identify our baseline.* Please email me with any data you do have, any benchmarks I can cite with some assurance. Doing so will directly help me - I don't want to publish a report that claims the Impact Investing market is somewhere between $4 billion and $2.71 trillion. Much more important - it will help the market.

*And yes, these kinds of indices are created in precisely this way. The Dow Jones Index, easily the most well-recognized such market measure, was created by a newspaper editor in 1896. By the way, it is now for sale.

But sure enough, I still get interview requests about the concept. I still get email pitches and PR announcements asking me to write about the latest, greatest version of it. And there is still NO RELIABLE DATA on how much money is raised this way, what percentage goes to charity, or what it costs to move that money.

And then I realized how much I like BetterWorldBooks. On one hand, it is a really cool social enterprise. On the other, embedded giving is the sine qua non of this company. To remind you - BetterWorldBooks buys used books from libraries and others and resells them online with part of the proceeds going to literacy programs around the world.

So I started to wonder about myself as a donor and as a consumer. Just in time along comes a white paper, From Legacy to Leadership: Is Philanthropy Ready for the New Consumer? to tell me who I am, what I care about and how nonprofits should respond to me. Now, to be clear, the paper is written by BBMG, a marketing consultancy, so they have skin in the game on this. You can get a copy of the paper here, but you will have to fill out a form adding yourself to BBMG's mailing list.

Here, in brief, is what I took from the paper. Today's consumer (i.e., me) is looking for 3 types of value from the brands they choose - practical, social, and tribal (BBMG's lingo, not mine. They are the marketers, after all.

Practical - does the item do what I need it to (BetterWorldBooks - sold me books I wanted at low cost).

Social - does it make me feel good about myself (BWB - Hey, I'm keeping old books out of the landfill AND helping support literacy programs)

Tribal - does the brand make me feel part of something cool that is bigger than myself (BWB is way hipper than Amazon - it lets me flaunt my "independent, do-gooder, 3BL" self, even as I surreptitiously read other stuff on my Kindle)

Sure, I'd like to think I'm too cool for this stuff. But there you have it - me, the brand, the white paper, and the very practice I most distrust (embedded giving) all wrapped up into a nice package.

Now if these were 501 c 3 organizations, the IRS would no doubt call all this "Unrelated Business Income." But since they are, nominally, commercial enterprises, the question arises, what is going on, when The New York Times is offering me membership opportunities, not just a chance to buy some news and read some advertising? I think the answer is the Times is trying to embed itself into my life even more than it already is, by becoming my trusted source of wine advice and a way to meet new friends (other wine club members), in addition to providing me news and Paul Krugman columns.

Maybe BBMG is right about what is going on - that our values and social goals are becoming as important in our consuming, donating choices as our practical needs. If so, then just as the public, commercial and philanthropic sectors are blending - see social enterprise, impact investing and the Office of Social Innovation for examples, - so are our individual behaviors.

If this is the case, and we are making consumer purchases on a mass scale that reflect our values and social goals, then embedded giving will truly be here to stay. It will become an integral part of new enterprises, B Corporations, L3Cs, and social enterprises. In essence, it will get ever more embedded - both through technology and through the kind of organizational hybridization represented by BWB. If this happens, there may be a bright side. With all the focus on measurement of social return in the Social Capital Markets, we may finally get some reasonable data.

"There are three things that I think will matter most to the social sector in 2010:

Increased Philanthropic Dollars Will Go to Organization Building. Donors will increasingly realize that they can achieve a greater social return on their investment (more social impact) when they invest in the capacity, or growth of a successful nonprofit. That is to say that donors will increasingly realize the power of BUILDING organizations rather than BUYING services. I don’t think donors will move away from buying services, there will still be a majority of that. But I think donors will start to understand the difference between a “donation” where they are simply supporting an organization’s current program, versus an “investment” that makes the organization stronger, healthier, better positioned to address the social problem head on.

Nonprofits Will Move From Outputs to Outcomes. And in order to meet this trend of donors wanting to invest rather than donate, nonprofits will begin to understand that they will attract more capital if they can demonstrate a social return on investment, or a change in outcomes, not just outputs. Outputs have been a favorite of the nonprofit sector, i.e. 500 kids went through our after-school program, 1,000 meals were served in our kitchen. But outputs don’t demonstrate social impact, or a change to a problem. Outcomes do, which is what investors increasingly will want to see. Outcomes are about changed lives, changed trajectories. It is so much more powerful and compelling to be able to say that the 500 kids that went through our after-school program stayed in school and increased their academic achievement which was a marked difference from their cohorts that didn’t attend our program. Then, if you can continue to track those children and demonstrate that they continued to stay in school at a higher rate than their contemporaries, you have a compelling change to a trajectory. You begin to show how your organization is an intermediary between donors who want to invest in social change and a change you are making in the community. I believe that philanthropic capital will begin to flow more readily to those nonprofit organizations that can demonstrate outcomes as opposed to outputs, and those nonprofits that can comply will be more successful at attracting capital.

The Social Capital Market Will Increasingly Include Philanthropic Capital. The social capital market to date has focused mostly on investing in social businesses that provide both a social and financial return. Philanthropy and nonprofit organizations have been somewhat left behind. But this will change with a growing recognition of the benefits of broadening the definition of social capital markets to include nonprofits and philanthropy. There is much to be gained when ALL organizations working towards social impact and ALL investors interested in social return can pool resources and work towards closer collaboration, creation of new financial vehicles, sharing of ideas and information.

Perhaps 2010 is too early for all three of these trends to really take hold, but I think the beginnings are there."

"Contraction & uncertainty. Can a field get to "impact" without abandoning folks with urgent needs as organizations fold/struggle? Is it “reset” or “retreat?” The corollary is that the lag of employment in relation to macro economic recovery will be critical. Needs will continue to rise throughout 2010 even if economy looks likes it's recovering. And will all those good NPers losing their jobs find new, better ones where they could have greater social impact?"

From an email from Michael Moody, USC:

"Economic recovery will take longer to reach the hardest hit, lowest income folks, and their continued (perhaps even rising) needs for basic services and urgent assistance in 2010 will force the field to innovate new ways to fulfill our persistent role of relieving immediate suffering. New ideas for doing so will spread, like the special "safety net funds" that community foundations have started this year."

From twitter:

"I think/hope it will be the use of networked collaboration to make efficient use of shrinking funds." @workingwikily

"change investor mindset and the role of mvmt bldg in phil+social sector" @FLO_A

Thanks everyone. Please take a minute to read through all the responses - this crowd really is wise. I'll do my best to make sense of it all.

Sunday, September 27, 2009

Last night my family and I had the great pleasure of hanging out with Beth Kanter and her family. Beth (@kanter) and I both have 9 year old sons named Harry - what other indicator do you need that we should get together? Among other things, we chatted about what blogging had brought into our lives....

Well, here's one living answer. Check this out...from my email this morning

"Hi, Lucy -- I'm working on an experimental Twitter tool that tracks a conversation. I grabbed the 2010 conversation so far and then hand-edited it into regular English, and I thought I'd send it on to you, in case it's useful. -- @peterkaminski.My website is http://peterkaminski.com/

Impact of and response to the economic recovery (slowness or lack thereof) and the inherent unintended consequences. -- @mmorino

Yes, the institution as we know it is dead. The illusion of institution boundaries is crumbling - collaboration proves more useful. Remix. -- @NurtureGirl

Foundations leveraging unrestricted funds to "challenge" people to engage in philanthropy (S.A. Comm. foundation match days trending upward.) The role of movement-building in philanthropy and the social sector as a whole. The closing doors of non-profit organizations due, a.k.a. the final wave of impact from the recession and the "new normal" that will emerge. -- @ChangeEvnglst

Movements, for all kinds of issues & sectors - movements any organization can join, and anyone can be a part of, and more sustained than campaigns. -- @engagejoe

Embracing Millennials/Gen Yers as full partners in the enterprise. Mission-related investing is embraced by a generation of chastened fund managers. -- @pndblog

The big story will (should) be the shift from serving causes to solving them. Audiences won't stick with nonprofits that don't make progress on issues and won't donate to groups that aren't having MAJOR impact. Note that MAJOR impact is not to be confused with activities that get attention or build lists. The whole way nonprofits operate will change in 2010. It won't be viewed that way; people will say the economy is still struggling, etc. But make no mistake, the shift will be in approach and strategy. Non-profits must operate with a new mindset and focus, or lose audience. -- @BrianReich"

Thank you, Peter! For some other input, that came to me via email, see this roundup. Here's the original blog post. And here are a few more tweets from this morning....Please keep the conversation going, coming, and moving on...Tweet me at @p2173, email at lucy@blueprintrd.com or comment below.

"2010 social sector: orgs that thrive will maximize existing resources, collaborate effectively and BE STATEGIC." @Hailayates

"the big story will (should) be the shift from serving causes to solving them....audiences won't stuck w/ NPs that don't make progress on issues. Won't donate to groups that aren't having MAJOR impact....nd note that MAJOR impact is not to be confused with activities that get attention, build lists....the whole way NPs operate will change in 2010. Won't be viewed that way, people will say economy still struggling, etc....but make no mistake, shift will be in approach and strategy. Operate with new mindset, focus, or lose audience." @brianreich

"Here's one for the list, Lucy. Embracing Millennials/Gen Yers as full partners in the enterprise...And here's one more: Mission-related investing is embraced by a generation of chastened fund managers" @PNDblog

“What trend, change, entity, or idea will matter most to the social sector in 2010?”

Here are your answers. Thanks for sending them in. Please keep them coming and as I start to see patterns - or as you do - we'll look into those. I will be publishing a monograph on Philanthropic Futures: 2010 and your answers are key insights for that (as well as all my work and writing.) Back in the day, Tom Sawyer famously used his friends to get out of doing his own work. Today we call this "crowdsourcing." I call it listening to your wisdom. And I Thank you.

"Impact of and response to economic recovery (slowness or lack thereof) and the inherent unintended consequences" @mmorino, @vppartners

"The closing doors of npos due a.k.a. the final wave of impact from the recession and the "new normal" that will emerge" @ChangeEvnglst

"the thing most essentially in need of change is investor mindset. the space between giving and investing real, but needs more people" @Kevindoylejones

"Maximize social return on assets nonprofits already have ($, people, knowledge)" @IdeaEncore"the institution as we know it is dead. Collaboration between/within orgs will create REAL change." @ntenhross"Accountability and transparency. Social Impact as a currency." @Conches“Foundations as Social Impact Knowledge Brokers” Sean Stannard Stockton

"Movements, 4 all kinds of issues & sectors - movements any org can join, & any1 can be a part of + more sustained than campaigns" @EngageJoe

Friday, September 25, 2009

What single idea, entity, practice, trend, force or innovation will matter most to the social sector in 2010?

I'm collecting your answers and ideas to this question and will include them, with attribution, in a monograph on the future of philanthropy to be published Q4 in 2009.

Sean over at tactical philanthropy answered this question here. If you blog in response to the question please let me know and we'll link here and keep the conversation alive. You can also email me your thoughts (lucy@blueprintrd.com), tweet me @p2173 or comment below.

Thursday, September 24, 2009

BetterWorldBooks, a very cool social enterprise, buys and resells books to raise funds for literacy programs around the world. Sometimes, they hit the jackpot. This happened today, when BWB finalized the sale of a rare 1848 facsimile of the Declaration of Independence that was found inside one of the books it was re-selling (unbeknownst to the original seller). The item fetched $16,000. Portions of the proceeds go to both the library (Dobbs Ferry Library at Mercy College) that sold the book and the nonprofit literacy organization (Books for Africa) that partners with the library through BWB.

The find was such a big deal in rare book circles, and such a wonderful surprise to all involved, that BWB is using the opportunity to implement a new commission structure on future sales of rare and antiquarian books.

A good news story in which the good guys (everyone, in this case) win.

By the way, another reason to love BWB is the online sidewalk sale finder - you can browse their site here to find book sales from libraries near you. Proceeds will benefit those libraries. Even as a 20-year "Friend of the SF Public Library" I'm not willing to risk bodily harm trying to get into our annual library's Big Book Sale fundraiser, so I love this functionality. I also recently recommended BWB to a Foundation library that was preparing to deaccession part of its collection - talk about "more for mission."

I'm supposed to be doing something else, so my mind wandered over here.

And here's my question. If anyone had bet you, on January 20th, 2009, the first day of the Obama Administration, that one of the more sordid scandals of the social sector in 2009 would involve undercover videographers masquerading as a pimp and prostitute that would result in the Congress, the IRS and several states (including CA, LA - which had no contracts to cut - and MS) voting to cut off funding to an organization reknown for helping register marginalized voters, would you have taken the bet?

And here's the real question. I can't decide if this is utterly predictable or actually surprising, given how politics work these days.

The project started with interviews, research, a paper and a wiki, rolls up to include discussions with invited experts and thoughtful challengers, continues to identify practical points for more experimentation and observation, and rolls out with your continued input and wisdom through this blog, in online conversation with key thinkers, and through as many other avenues as we can engage. One goal is to include as many insights as possible from the known gurus of technology and philanthropy and those whose expertise may seem further afield (legal underpinnings of the networked information economy; commons experts; engineering, design and production tinkerers; public space policy wonks and so on)

The changes are not about the digital technologies that allow access, or about the data themselves. They are about the expectations and behaviors they unleash.

These changes, coupled with changes in the public and private sectors, are pushing a transition to a "social economy" made up of interdependent public, private and philanthropic capital and creators of social goods.

All of these changes are not an end of a story, they are simply the beginning.

Philanthropy is an industry of passion and volunteerism in which collusion should be encouraged. It may not change in the same way, at the same speed, or driven by the same forces as the newspaper or music industries or the public sector.

Part two, (this part), highlights two areas where I think data are serving as the platform for change, but they are not themselves the interesting part of the story. In other words - to build on bullet point number two above - the technologies change behavior and so do the data. The two areas to look at:

cloud technology and

peer to peer philanthropic networks.

What is cloud technology? Let me try to explain by providing some examples - Google docs, Yahoo mail, Flickr, Quicken Online, and Facebook causes. Cloud technology is when you are typing on a keypad but the software and the documents you are using are based "out there" -- in the clouds. They are not stored on your machine but remotely. You turn on, check in, use what you need, and log off. The applications you are using - word processing programs, photo storage and tagging, checkbook management, and social networking - are ready when you are, available from anywhere, and you only use what you need when you need it. Sound familiar? It should, it is how electricity works for most of us.*

So what? Well, there are two main reasons this kind of shift matters to philanthropy. First, donors and foundations and nonprofits tend not to be expert in managing software and hardware. One of the great promises of cloud computing is that individuals and organizations don't need to manage as much of that stuff as they do when all the data and applications are hosted on their own servers. Nick Carr's comparison is useful here - the difference between cloud computing and our current IT setup is the difference between switching on the lights for electricity from a central utility and every organization having to maintain their own power plant. There are significant concerns still about security of data in the cloud, and this post should not be read as an endorsement for any of the companies or services mentioned so far. That said, the shift to remote software use (that allows you to access anything from anywhere you happen to be, with your mobile phone, laptop, netbook, desktop, and soon, no doubt, your refrigerator) does matter.

Not only because it can save organizations a lot of money (though that will help and will drive the adoption of these tools) and allow them to allocate human resources differently. But because of the behavioral changes that cloud computing facilitates. When I can access my data from anywhere I can choose to share it with anyone else anywhere anytime also. And that allows us to work together, create new things together, improve them together, and share them with others.

What might we create that matters to philanthropy? How about a single shared session form for substance abuse counselors that stores the information they need to work with individual clients but that is also anonymized and aggregated instantly to produce quarterly and final reports to funders? Or a set of housing standards that different community development organizations can contribute to, use regularly in their daily work, and benchmark themselves against their peers? Or real-time disaster information texted in from proximal locations so that responders can track the path of hurricane damage? Or a national effort to change how states report nonprofit data, built entirely by volunteers and managed remotely with free software and free conference calling tools? Or insights from site visits that peer networks of donors can contribute to, add research links around, discuss, and use to guide their individual as well as collective grantmaking?

Those are all real examples, by the way. There are dozens - if not hundreds or thousands - more. (Should I begin building a list? Has anyone already started one?Where in the cloud will I find it?) And whatever examples we can find, we know they are only the beginning. As Holly Ross of NTEN notes, what the cloud really helps with is "sense-making in the new data-scape," or as Holly puts it:

"Making sense of all this data is going to be our key challenge as a sector as we move forward. But the cloud is going to help us in this regard, because the cloud makes it exponentially easier for us to move data around.

In the cloud, we can share client service data with other organizations and map it against the need demonstrated by census data. In the cloud, we can create visualizations of our data that make those multi-colored spreadsheets finally make REAL sense. In the cloud, we'll be able to record even more of the ways our constituents interact with us, and interpret what that means."

If you'd like to see Holly's slides on this subject, they are available on Slideshare (Cloud).

The second area of change is the rise of peer networks, of donors and do-ers. Sometimes these networks are separate - just donors or just activists - and sometimes they are one and the same. That in and of itself is a change from the past, where those who donate and those who do the work are publicly, consistently, and productively working together. Why is this happening? Lots of reasons, but for one the social network tools that each group uses don't filter the way conference organizers used to. As conference organizers open up panels and Q + A sessions to those not in attendance the conversations diversify and change.

More to the point, however, is the rise of these networks in general. Peer networks of donors, of program officers, of nonprofit ceos, of board members are all 1) easier to organize now because of technology, 2) more useful to their members because they can more easily share data and insights through the networks, and 3) changing how we think about expertise. Professionals who run foundations and nonprofits are used to accessing their peers in other organizations, and the tools to do so (conferences, listservs, affinity groups, funding collaboratives) have long been part of the infrastructure of their workplace.

What is new is the development of a similar infrastructure for the volunteers who fill the sector - especially donors, board members and activists. Technologies that connect people - by interest area and with robust access to shared data sources - are readily available. Just as environmental program officers in large foundations have a peer group of other environmental program officers at other foundations, environmentally focused donors are now connecting directly with their peers. Same thing with regionally-focused donors, or activists interested in public data access, individuals who share a diaspora experience or those committed to global giving. The Acumen Fund shows how a data-driven portfolio approach can be used to attract donors to new forms of investing; the Global Impact Investing Network's Investors Council, SeaChange Capital Partners, Growth Philanthropy Network, are all examples of new networks for donors and social investors.

Second, these peer-supported, data-informed, passion-activated, and technology-enabled networks may just represent a whole new structural form in philanthropy. In 1913 John D. Rockefeller established the first American foundation. He needed an institution that could provide financial and knowledge services for his philanthropy for the long term. The re-bundling of data by peers hints at new needs. Network weaving and just-in-time data matter more, and the structures that support them will need to be as flexible, scalable, and portable as the networks they will serve. On the cusp of the first American foundation's centennial, we may be looking at the dawn of a new complementary form.

***

So, what do you think? Do you have more cloud-based examples of new approaches to giving or social change? Do you know of an online list (cloud-based) that I could access and reference? Am I nuts to think networks might matter as much as institutions going forward? Will program officers really become passe? Can peer networks replace professional advisers?

I welcome your comments, here and on twitter [@p2173]. We'll do our best to incorporate the ideas and suggestions into the paper and the project, and please believe me when I say, the discussions you and I are having on this blog, email and in twitter matter to this work. Thanks for all your help and please keep chiming in.

Stay tuned for Part Three: is there a conflict between the marketization of philanthropy as an industry and the real trajectory of a "networked information economy?"

Wednesday, September 16, 2009

(Note to my cherished email subscribers: I'm not sure why the email posts are suddenly truncated, I'm working on it. In meantime, the Title links in your email should be live and take you through to the blog itself. Thanks!)

Thank you all who have been chiming in and pointing me to resources for the Decoding the Future of Philanthropy work. Proof of the wisdom of crowds. For those following along, here's what folks have been sending me:

Resources:

post by Richard McManus on ReadWriteWeb: http://www.readwriteweb.com/archives/top_5_web_trends_of_2009_structured_data.php The first in a series of posts by McManus on the top five Web trends of 2009,

Steve Waddell from Iscale - and his thinking about networks and social network analysis, http://www.scalingimpact.net/content/strategic-mapping-and-visual-diagnostics-scaling-change

Supernova's "Big Shift" presentation by Seeley-Brown, and Hagel II

Questions:

I am interested in your take on the relationship between "augmenting" (from RWW) and the role of network design in "speeding the flow of tacit knowledge." The latter is JSB and Hagel's proposed new "leading indicator" of organizational performance.

One thought where does interpretation of the data come in and the predicted sexiest job of the next decade, analyst/statistician?

Agree w/tech/data being more available &visible but worry about the constraints of analytic/strategic thinking capacity

These are all very helpful! My colleagues at Duke and I are diving into the resources noted above and pondering the questions asked. I don't have answers yet (may never have them) but will try to keep these conversations going, please chime in if you have thoughts on the above!

Some more information on the project itself so you can stay involved (please!). We are working on a paper about the transformative (?) role of technology in philanthropy. The first draft will soon be ready to share and we're looking to publish the paper by the end of 2009. Our working title is "Disrupting the Social Economy." The work is supported by the John D. and Catherine T. MacArthur Foundation. As part of the project there will be meeting hosted by the Duke Center for Strategic Philanthropy and Civil Society.

AND we want to engage in many, broader conversations than a single meeting can possibly foster. These blogs posts are derived from and feeding into the paper itself, we'll share the paper as widely as we can, we still welcome readers of this draft and those to come (send me your email address), and we'll try to use blogs, twitter, online sites as best we can - your advice on how to do this is welcome and necessary (again, please email me your ideas).

Your work is what will enrich this work enormously - if you are part of a "digital native" change network, are using data to advance a social policy agenda in ways previously not possible, are donating professional services and expertise through an informal network to make change happen - please, let us know what, how, and why you are doing what you are doing. If you are part of an online discussion, blog exchange, are holding a meeting, planning a conference, or putting together a panel discussion where the ideas we're addressing will fit, please be in touch - we want to share our ideas in those forums and learn from you. If you disagree with these posts, think we're missing key trends or drivers or change (or stasis) let us know.

Basically, it is fast moving conversation among many people, we're just trying to put some well-structured research and ideas into it and go along for the ride!

And, for those of you kind enough to "clamor" for part two and beyond of the "Decoding" posts, I'm working on them. My intended areas of focus for

part two: cloud technology and peer to peer philanthropic and change networks.

Part three: the possible conflict between the marketization of philanthropy as an industry and the real trajectory of a "networked information economy."

The work of Larry Lessig, Yochai Benkler and David Bollier are critical for part three - I'd welcome thoughts from them, those who've read their work, and those who can add to it or disagree with it....I'm reading as fast as I can, trying to understand the implications of these legal and economic frames for innovation, information, and production and their application to the social economy. I'd welcome anyone who wants to engage with me in an online chat about this stuff - electronically facilitated graduate seminar anyone? Anyone?

Tuesday, September 15, 2009

Apparently the email version of this post got truncated (ahh, technology) so I'm posting it again. This is part one - much more to come....

I'm going to try to weave together several themes in this post. Since I am famous for "burying the lead" I'm going to get to the point and then begin weaving.

The point: data are the new platform for change. They will continue to fundamentally alter how philanthropic capital flows.

The changes are not about the digital technologies that allow access, or about the data themselves. They are about the expectations and behaviors they unleash.*

These changes, coupled with changes in the public and private sectors, are pushing a transition to a "social economy" made up of interdependent public, private and philanthropic capital and creators of social goods.

All of these changes are not an end of a story, they are simply the beginning.

Philanthropy is an industry of passion and volunteerism in which collusion should be encouraged. It may not change in the same way, at the same speed, or driven by the same forces as the newspaper or music industries or the public sector.

Here are several influential information sources for my thinking:

An incredible conversation I had on Sunday with 40+/- members of the Iranian- American community, most from Silicon Valley, many of whom are driving the changes at household-name internet technology companies or are the folks that financed those companies and are financing their successors;

So, how do I substantiate the claim that data are the new platform for change? Largely by looking at what has already happened. Philanthropic foundations and individual donors used to work alone, they had exclusive access to key information on giving opportunities, conducted their due diligence, made grants, and moved on to the next thing. They shared information reluctantly, mostly on paper. Many strove for anonymity. They rarely acted together, paid lip service to sustainability (exit strategies largely consisted of "ending our funding"), and hesitated to endorse their grantee partners to other funders.

Technology has already changed all of the above behaviors. This varies in degrees at different institutions, but in general, the level of public visibility into the sector in 2009 is exponentially greater than it was in 1999. Donors - of any size - can find nonprofits and social entrepreneurs - and sort them by region, issue, and size using Guidestar, NetworkForGood, GlobalGiving, Kiva or any of a 100+ other sites. Media have drawn unprecedented attention to the sector.

(Visibility into the sector is not the same as visibility into how the sector works. Nor is visibility the same as transparency. I'll come back to both of these points.)

Public visibility is driven by, and drives, another major shift - where expertise lies. Just as newspaper editorial pages and television broadcasters once determined "what news matters," expertise used to reside within the walls of foundations, think tanks, and nonprofits. These professionals set strategy, identified partners, and drove dollars from inside institutions. But, just like Elvis, the "expertise has left the building." As Morino articulates so well, crowds and individuals are now determining what gets discussed, mashing together data to show hidden stories, working with professional resources to investigate leads, and demanding access to public data. The work of The Sunlight Foundation to open up government data, new efforts by government agencies to share that information willingly (see datasf, the DC Data Catalog, and the White House), and citizen-driven efforts such as TheyWorkForYou to open the doors of the public sector have tipped from being anomalies to being the new normal.

Now, not all data are equal, nor are all data equally available. Driven by these recognitions, a volunteer group of donors, activists, and techies in San Francisco is launching a citizen-driven effort to unlock nonprofit data and make it visible and useful. This effort, represented in an alpha-state website found at nonprofitmapping.org, is aimed at getting state attorneys general and the IRS to make basic data on the nonprofit sector freely available in a consistent form so that the public can use it.** The effort was spurred by donors' interest in the rate at which nonprofits in the Bay Area were closing down as a result of economic pressures. In loose partnership with the United Way of the Bay Area and with help from the SVT Group the volunteers started trying to map those closures so that anyone could see the impact in their neighborhood, on issues they cared about. Turned out it couldn't be done using freely available public data sources. And thus the ball began to roll. This citizen-driven effort complements Guidestar's "report card" effort to encourage nonprofits to share more info, more readily and in something closer to real-time. It also speaks to the policy issues that matter in this space,access to public data being a policy realm unto itself.

NonprofitMapping is an example of the shift from making the sector visible to making its inner workings and deal flow visible. I'm a child of the 1970s and Watergate so I believe strongly that actually understanding how things work is a matter of following the money. Once we can really see philanthropic dollars - in flow with public dollars, individual contributions, political contributions, and corporate support - then we'll have really useful visibility into philanthropy and nonprofits. And then the data and the expertise and the networks of users will innovate off of that data platform...and change will continue.

Now the partnership described above - volunteers, donors, techies, and the United Way - are another example of the power of external expertise plus access to digital tools, that Morino cites as a driver of "the new sunshine." They have some great analogs to mimic, including theHealthyCity project which has made data on hard-to-find populations available online and will be spreading across California by January 2010. The model for spreading the tools is also notable - this is free, open source franchising at its best. If nonprofitmapping can solve the problem in San Francisco, then other communities can easily follow suit. Simultaneously, the lessons and tools developed by others can be incorporated into the San Francisco effort.

The combination of visibility, expertise, and data inform the next key force - networks. All of what I've discussed so far is only made possible because of the proliferation of networked information processing tools. Now these tech-based networks are unleashing the power of human networks and these networks are, in turn, changing organizations. Clay Shirky has literally written the book on this, workingwikily provides you with a living forum to learn about this and the experts in network analysis just seem to keep getting smarter and smarter.

But these networks matter for philanthropy in ways we are only just beginning to see. They are fundamentally shifting how communities organize and what value they bring when they come together. The value of community foundations, for example, has been found in the knowledge that their boards and staff bring to community philanthropy. National donor advised funds eroded community foundations' advantage as a transaction processor. New online data sources threaten the foundations' efforts to build business models around knowledge.

Even more important, the expertise that matters can now be found in networks of donors and partners. Those networks' connections to the foundation may be transitory. They are definitely not monogamous - donors have lots of interests, lots of giving vehicles, and lots of advisory sources. Donor networks are fluid, multi-networked, and informed by cheap or free data. The value that foundations or advisers offer will come from strengthening or informing those networks, not forcing donors into their established structures or business models.

Many of the drivers of change, the external forces, on philanthropy are the same as those on other industries. Given all of this, shouldn't we be able to assume that "cracking the code" of philanthropy's future will be simply a matter of finding the right mix of industry analogs? I don't think so.

There are some countervailing forces that we need to consider. First, remember, participation in the social economy is voluntary for donors. They can opt out at any point. They are not subject to the same systemic market or political forces that drive change across other sectors. If demands for visibility become too strident, or if visibility morphs into norms or requirements for greater transparency, we will likely see a rise in the use of options that protect anonymity (donor advised funds, for example). Second, while data may be the platform for change, not all funders need to climb aboard. Most of the innovation in data and donors has happened down the long tail of giving - kiva, globalgiving and other online giving platforms are data-powered communities. But data do not always inform or drive passion. We cannot presume that the current attention on evidence, outcomes, metrics and impact are universal, will persist, or will ever migrate into those areas of social good where intuition, direct experience, fun, or passion are shaping forces.

The drivers of change on philanthropy are easy to see. We can extrapolate from other industries and other experiences. But philanthropy is not like every other industry. And the secret code to its future may unfold more like the clues in a Dan Brown thriller than in the cryptography of market-based industries or electoral politics.***

* Networked information economy is Yochai Benkler's term, used in The Wealth of Networks, it is a must-read for understanding the social, political and economic breadth of change currently underway. Charlene Li and Josh Bernoff's book, Groundswell, is a wonderful review of these changes in companies. Social Economy is my term for enterprises and financing sources dedicated to production and distribution of social goods.** I'm delighted to be joining this effort in a volunteer capacity.*** Yes, this is blatant pandering to the release date of The Lost Symbol and, yes, I do read trashy novels in between books on network theory.

Monday, September 14, 2009

I'm going to try to weave together several themes in this post. Since I am famous for "burying the lead" I'm going to get to the point and then begin weaving.

The point: data are the new platform for change. They will continue to fundamentally alter how philanthropic capital flows.

The changes are not about the digital technologies that allow access, or about the data themselves. They are about the expectations and behaviors they unleash.*

These changes, coupled with changes in the public and private sectors, are pushing a transition to a "social economy" made up of interdependent public, private and philanthropic capital and creators of social goods.

All of these changes are not an end of a story, they are simply the beginning.

Philanthropy is an industry of passion and volunteerism in which collusion should be encouraged. It may not change in the same way, at the same speed, or driven by the same forces as the newspaper or music industries or the public sector.

Here are several influential information sources for my thinking:

An incredible conversation I had on Sunday with 40+/- members of the Iranian- American community, most from Silicon Valley, many of whom are driving the changes at household-name internet technology companies or are the folks that financed those companies and are financing their successors;

So, how do I substantiate the claim that data are the new platform for change? Largely by looking at what has already happened. Philanthropic foundations and individual donors used to work alone, they had exclusive access to key information on giving opportunities, conducted their due diligence, made grants, and moved on to the next thing. They shared information reluctantly, mostly on paper. Many strove for anonymity. They rarely acted together, paid lip service to sustainability (exit strategies largely consisted of "ending our funding"), and hesitated to endorse their grantee partners to other funders.

Technology has already changed all of the above behaviors. This varies in degrees at different institutions, but in general, the level of public visibility into the sector in 2009 is exponentially greater than it was in 1999. Donors - of any size - can find nonprofits and social entrepreneurs - and sort them by region, issue, and size using Guidestar, NetworkForGood, GlobalGiving, Kiva or any of a 100+ other sites. Media have drawn unprecedented attention to the sector.

(Visibility into the sector is not the same as visibility into how the sector works. Nor is visibility the same as transparency. I'll come back to both of these points.)

Public visibility is driven by, and drives, another major shift - where expertise lies. Just as newspaper editorial pages and television broadcasters once determined "what news matters," expertise used to reside within the walls of foundations, think tanks, and nonprofits. These professionals set strategy, identified partners, and drove dollars from inside institutions. But, just like Elvis, the "expertise has left the building." As Morino articulates so well, crowds and individuals are now determining what gets discussed, mashing together data to show hidden stories, working with professional resources to investigate leads, and demanding access to public data. The work of The Sunlight Foundation to open up government data, new efforts by government agencies to share that information willingly (see datasf, the DC Data Catalog, and the White House), and citizen-driven efforts such as TheyWorkForYou to open the doors of the public sector have tipped from being anomalies to being the new normal.

Now, not all data are equal, nor are all data equally available. Driven by these recognitions, a volunteer group of donors, activists, and techies in San Francisco is launching a citizen-driven effort to unlock nonprofit data and make it visible and useful. This effort, represented in an alpha-state website found at nonprofitmapping.org, is aimed at getting state attorneys general and the IRS to make basic data on the nonprofit sector freely available in a consistent form so that the public can use it.** The effort was spurred by donors' interest in the rate at which nonprofits in the Bay Area were closing down as a result of economic pressures. In loose partnership with the United Way of the Bay Area and with help from the SVT Group the volunteers started trying to map those closures so that anyone could see the impact in their neighborhood, on issues they cared about. Turned out it couldn't be done using freely available public data sources. And thus the ball began to roll. This citizen-driven effort complements Guidestar's "report card" effort to encourage nonprofits to share more info, more readily and in something closer to real-time. It also speaks to the policy issues that matter in this space, access to public data being a policy realm unto itself.

NonprofitMapping is an example of the shift from making the sector visible to making its inner workings and deal flow visible. I'm a child of the 1970s and Watergate so I believe strongly that actually understanding how things work is a matter of following the money. Once we can really see philanthropic dollars - in flow with public dollars, individual contributions, political contributions, and corporate support - then we'll have really useful visibility into philanthropy and nonprofits. And then the data and the expertise and the networks of users will innovate off of that data platform...and change will continue.

Now the partnership described above - volunteers, donors, techies, and the United Way - are another example of the power of external expertise plus access to digital tools, that Morino cites as a driver of "the new sunshine." They have some great analogs to mimic, including the HealthyCity project which has made data on hard-to-find populations available online and will be spreading across California by January 2010. The model for spreading the tools is also notable - this is free, open source franchising at its best. If nonprofitmapping can solve the problem in San Francisco, then other communities can easily follow suit. Simultaneously, the lessons and tools developed by others can be incorporated into the San Francisco effort.

The combination of visibility, expertise, and data inform the next key force - networks. All of what I've discussed so far is only made possible because of the proliferation of networked information processing tools. Now these tech-based networks are unleashing the power of human networks and these networks are, in turn, changing organizations. Clay Shirky has literally written the book on this, workingwikily provides you with a living forum to learn about this and the experts in network analysis just seem to keep getting smarter and smarter.

But these networks matter for philanthropy in ways we are only just beginning to see. They are fundamentally shifting how communities organize and what value they bring when they come together. The value of community foundations, for example, has been found in the knowledge that their boards and staff bring to community philanthropy. National donor advised funds eroded community foundations' advantage as a transaction processor. New online data sources threaten the foundations' efforts to build business models around knowledge.

Even more important, the expertise that matters can now be found in networks of donors and partners. Those networks' connections to the foundation may be transitory. They are definitely not monogamous - donors have lots of interests, lots of giving vehicles, and lots of advisory sources. Donor networks are fluid, multi-networked, and informed by cheap or free data. The value that foundations or advisers offer will come from strengthening or informing those networks, not forcing donors into their established structures or business models.

Many of the drivers of change, the external forces, on philanthropy are the same as those on other industries. Given all of this, shouldn't we be able to assume that "cracking the code" of philanthropy's future will be simply a matter of finding the right mix of industry analogs? I don't think so.

There are some countervailing forces that we need to consider. First, remember, participation in the social economy is voluntary for donors. They can opt out at any point. They are not subject to the same systemic market or political forces that drive change across other sectors. If demands for visibility become too strident, or if visibility morphs into norms or requirements for greater transparency, we will likely see a rise in the use of options that protect anonymity (donor advised funds, for example). Second, while data may be the platform for change, not all funders need to climb aboard. Most of the innovation in data and donors has happened down the long tail of giving - kiva, globalgiving and other online giving platforms are data-powered communities. But data do not always inform or drive passion. We cannot presume that the current attention on evidence, outcomes, metrics and impact are universal, will persist, or will ever migrate into those areas of social good where intuition, direct experience, fun, or passion are shaping forces.

The drivers of change on philanthropy are easy to see. We can extrapolate from other industries and other experiences. But philanthropy is not like every other industry. And the secret code to its future may unfold more like the clues in a Dan Brown thriller than in the cryptography of market-based industries or electoral politics.***

* Networked information economy is Yochai Benkler's term, used in The Wealth of Networks, it is a must-read for understanding the social, political and economic breadth of change currently underway. Charlene Li and Josh Bernoff's book, Groundswell, is a wonderful review of these changes in companies. Social Economy is my term for enterprises and financing sources dedicated to production and distribution of social goods.** I'm delighted to be joining this effort in a volunteer capacity.*** Yes, this is blatant pandering to the release date of The Lost Symbol and, yes, I do read trashy novels in between books on network theory.

Thursday, September 10, 2009

"NonProfitMapping.org will transform previously inaccessible data sets into useful knowledge than can be made broadly available using the Web, geospatial mapping tools, and social media."

Another way to put this is (as was just tweeted by @SVTgroup) "one of the best ways to really do "venture philanthropy" is through sharing data... open philanthropy." I couldn't agree more. The building blocks of open philanthropy rely on data sharing. The article on technology and philanthropy I'm working on for Fall publication posits that data will be the platform for the social economy (philanthropy to impact investing) going forward.*

NonprofitMapping looks like a great effort. I just ran through the "team" page and realized I know some of these folks. Gotta go try to get on the phone with them and learn more about it. I'll be watching this. You should too.

*Now in draft form. Please make note in comments or email me [lucy (at) blueprintrd dot com], or tweet @p2173 if you'd like to be sent a copy when it is published from the Duke University Center for Strategic Philanthropy and Civil Society

Monday, September 07, 2009

I had the honor of facilitating a session on metrics at last week's Social Capital Markets conference. I also had the duty of apologizing for the name of the session, which was Metastasizing Metrics. I didn't name it, I just moderated it.

I've done a lot of moderating. This session called for every trick in the book. We had five incredible panelists (Kevin Starr, Mulago Foundation; Brad Presner, Acumen Fund; Margot Brandenburg, Rockefeller Foundation and IRIS; Laura Callanan, McKinsey & Co.; Steve Wright, SalesForce.com Foundation), each of whom has spent years working on their piece of this complicated puzzle. So of course, in typical panel fashion, we were going to ask them to describe their work in 2 minutes or less. And then we were going to take questions from the 100+ people who'd come to learn about their work, try to get good discussions going, highlight the very important tensions in this work, and point people to more information. All in 60 minutes. Ready. Go.*

So that is what we did. Here are two independent reviews of the session - one from Stephanie McAuliffe of the Packard Foundation and the other from Jack Samuelson of GIIN. (If you know of other reviews posted on the web please link to them in the comments. Thanks.)

My thoughts on all this:

The panel represented measuring efforts from several vantage points - a single foundation (Mulago), a portfolio of projects (Acumen, Pulse), social investors' reporting needs (IRIS), across a sector (McKinsey's database) and within a context that might allow benchmarking (SalesForce.com and others). How these pieces could or will or won't fit together something we didn't get to really talk about.

Two inquiries from the room - one about the current state of starvation of established enterprises and another from a new entrepreneur reflecting the abstract terror that the metrics discussion was fomenting in him - were really important, and no real discussion of how they relate to each other or the full range of panel expertise was possible.

What is the "gold standard" in evaluation? Is there such a thing? An impassioned disagreement about random control trials got started in Room 370 of Fort Mason, but we didn't have the chance to hear from more than 2 people in the room and certainly didn't push the state of understanding on this issue much further.

I do, in fact, think metrics are the carbon of the social impact ecosystem and that the policy environment is the oxygen. We better get the balance right. Thanks to all who picked up on this new metaphor I've been trying out.

As unfortunate as the title of the session was, it did cause each of the panelists and me independently to look up the meaning of the word metastasizing. It means to spread or grow by changing position or form. The negative connotations come because the word is almost exclusively used in reference to cancer. However, spreading or growing by changing is not, inherently, a bad thing. I do hope those in the session, or readers who click through to read the reviews of the session above, note that we have reached a critical point in the discussion about metrics. Time was, metrics were optional, elusive, or unknown. Now they are plentiful, pervasive, and dynamic. That calls for a different discussion than we've had in the past. I hope we started one at #SoCap09. And that we will find many ways to continue it.

*If it is not obvious from my tone, I think this whole panel structure thing is a particularly ineffective way to learn and find it amazing that we - collectively - just keep falling back to it. Then again, I don't organize conferences, I just attend, speak, and moderate at them.

About me

Why is this blog called Philanthropy 2173?

This is a blog about the future. The year 2173 seems sufficiently far enough in the future to give us some perspective. As sure as we are of ourselves now, talking about the future - and making philanthropic investments - requires that we keep a sense of modesty and humor about what we are doing. Philanthropy is for the long-term - for the year 2173.